The approval took immediate effect Tuesday. Councilman Steve Bohannon voted against the ordinance and told the Journal-News that he was concerned about the rental amount.
The lease agreement costs $28 per square foot and will not exceed $70,000 per year. The lease would also include costs to help operating expenses of up to $2 per square foot, up to $75,000 in payments to help improvements and the city paying its own utilities.
In December 2016, council approved a resolution to lease the building’s first floor.
Some council members asked for costs for a 10-year lease to possibly lower the costs. Initially, the city did not want a 10-year lease, according to city officials.
Coon told council last month that they had the bank approvals but needed a signed lease from the city so banks can release funds as part of a complicated financial arrangement to redevelop the building. The project is expected to be completed in late 2020.
“It doesn’t work without the lease,” he said.
Coon has redeveloped 12 buildings in Hamilton and is involved in the Spooky Nook Sports Champion Mill project. He could not be reached for comment on Tuesday’s council vote.
Although the 10-year lease figures requested by council were not received by the city before Tuesday’s meeting, both Vice Mayor Tal Moon and Councilwoman Ami Vitori expressed their support for the project when it came up for a vote. Two weeks ago, both Moon and Vitori asked for more information to determine if there was a better way to finance the project with a longer lease.
Moon said he wanted to thank Coon for taking on this project.
“These are not easy deals to complete,” Moon said. “It takes someone with a vision and a unique business skill set to get it done. I’m looking forward to supporting the project and planning to support it tonight. It’s a great future property for the city’s economic development staff.”
Vitori said she wants to get the project started and will support it because there are people who want to get one of the planned apartments in the building.
“When I first came back to town, it was one of the first things that inspired me to get involved downtown,” Vitori said.
The project has been delayed due to issues including water damage from a broken interior fire main on the building’s fourth floor on New Year’s Day 2018 with water running from the pipe for more than 48 hours. Earlier this year, a nearby Duke Energy transformer malfunctioned filling the building with black smoke. Coon said the building was without electricity for two months but there was no other damage to the building. He is targeting completion of the project for late 2020.
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